Determinants of non-mining private investment in Botswana

Grace G. Kgakge
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Grace G. Kgakge: Botswana Institute for Development Policy Analysis

No 23, Working Papers from Botswana Institute for Development Policy Analysis

Abstract: The paper seeks to identify factors influencing and determinants of non-mining private investment in Botswana. It presents various studies conducted in other countries with modified assumptions to suit Botswana economy. It makes policy recommendations for investment strategies. The study concludes that in the long run, real GDP has a positive impact on non-mining private investment in Botswana. In line with government’s endeavour to diversify the economy, diamond proceeds have been converted into other economic activities resulting in increased output. The real exchange rate also influences non-mining private investment positively. Pula depreciation has a positive effect on non-mining private investment as it increases competitiveness of good and services in the domestic economy. The paper highlights two policy implications from the conclusions drawn: Government should diversify the economy further to increase output. Government exchange rate policy should not encourage high appreciation in the national currency as this would lead to a fall in the non-mining investment as a result of a decline in competitiveness of Botswana goods and services.

Keywords: Investment; Private investment; Economic diversification; Exchange rates; Botswana (search for similar items in EconPapers)
Pages: 31 pages
Date: 2002-02
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